Article 2 — Sales · Section 2-302
This section addresses unconscionable contracts within the scope of Article 2 of the UCC, providing guidelines for enforcing equitable agreements.
Source: U.C.C. § 2-302
If the court finds the contract or any clause of the contract to have been unconscionable at the time it was made, the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may limit the application of the unconscionable clause to avoid an unconscionable result.
This section allows courts to refuse to enforce contracts or specific clauses that are deemed unfair or one-sided when made. The goal is to prevent unjust outcomes in contractual agreements.
A contract or clause that is excessively unfair and oppresses one party, typically due to disparity in bargaining power.
Example 1
A consumer signs a contract with a car dealership that includes a clause preventing them from suing the dealership in case of fraud. If deemed unconscionable, the court may invalidate that clause.
Example 2
A contract for the sale of goods imposes a penalty that is disproportionately high for a minor breach by one party. A court might find this clause unconscionable and refuse to enforce it.
Example 3
A consumer agreement imposes ridiculously high fees for cancelling a service, significantly outweighing any reasonable cost associated with such cancellation.